Lemon Laws protect consumers and provide compensation for defective automobiles, trucks, motorcycles, and most vans.

There is a Federal Lemon Law and also a North Carolina Lemon Law.

The federal law is called the Magnuson-Moss Warranty Act.

Generally, a vehicle that has undergone multiple repairs using the manufacturer’s factory warranty qualifies under the state and federal Lemon Laws.  Compensation under the Lemon Laws may include replacement, refund, or monetary damages.

North Carolina Law
Since 1987, North Carolina has had its own Lemon Law, also called the New Motor Vehicles Warranties Act.  This law defines what a “lemon” is, what relief may be granted, and requires a manufacturer to pay triple damages and attorney’s fees if he unreasonably refuses to grant damages to a buyer or consumer leasing a lemon.
 
To qualify for relief under this act, the vehicle must be a “lemon.”  A “lemon” is a vehicle that is seriously defective and could not be repaired in a reasonable number of attempts.  To be seriously defective, the defect or condition must “substantially impair the value of the new motor vehicle to the consumer.”  The part of the car containing the defect must be covered in the manufacturer’s express warranty.  Many problems with a car can be covered under the law, even if the car is still drivable.  For example, peeling paint must be repaired by the manufacturer under the NC Lemon Law.  Other covered defects include leaks, lack of heat or air conditioning among other things, as long as the defect substantially impairs the value of the vehicle.

The law applies to new cars, pick-up trucks, motorcycles, and most vans bought in N.C.  This law requires new vehicles to be repaired for defects within the first twenty-four months or 24,000 miles, whichever comes first or within the manufacturer’s express warranty period. 

If your car has a problem within the allowable time period, contact the manufacturer in writing.  Give them a reasonable time to fix the problem but not more than fifteen days.  If the car is repaired more than four times for the same problem or has been out of service for a grand total of twenty days in a twelve month period of the warranty, the manufacturer must give the consumer a remedy.

A purchaser is entitled to a refund of:

1. The full contract price including, but not limited to, charges for undercoating, dealer-preparation and installed options, plus the non-refundable portions of extended warranties and service contracts

2. All supplemental or collateral charges, including but not limited to, sales tax, license and registration fees, and similar government charges

3. All finance charges incurred by the consumer after he first reports the defect to the manufacturer, its agent, or its authorized dealer; and

4. Any incidental damages and monetary consequential damages, less a reasonable allowance for the consumer’s use of the vehicle.  Incidental damages include, among other things, reasonable expenses for inspecting and transporting the vehicle (e.g., towing expenses), costs to cover alternate transportation (e.g., rental car fees), and hotel expenses, if any. Monetary consequential damages include the value of lost use generally.


A leasing consumer is entitled to a refund of:

1. All sums previously paid by the leasing consumer under the terms of the lease

2. All sums previously paid by the leasing consumer in connection with entering into the lease agreement, including, but not limited to, any capitalized cost reduction, sales tax, license and registration fees, and similar government charges; and

3. Any incidental and monetary consequential damages.

Note that any cars purchased or leased before October 1, 1987 are not covered by the lemon law.

For questions about NC’s Lemon Law, call toll free in N.C. 1-877-5-NO-SCAM.